{"id":118825,"date":"2021-03-29T10:43:25","date_gmt":"2021-03-29T10:43:25","guid":{"rendered":"https:\/\/precoinnews.com\/?p=118825"},"modified":"2021-03-29T10:43:25","modified_gmt":"2021-03-29T10:43:25","slug":"exclusive-grindrs-u-s-security-review-disclosures-contradicted-statements-made-to-others","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/exclusive-grindrs-u-s-security-review-disclosures-contradicted-statements-made-to-others\/","title":{"rendered":"Exclusive: Grindr's U.S. security review disclosures contradicted statements made to others"},"content":{"rendered":"

NEW YORK (Reuters) – When Grindr Inc\u2019s Chinese owner sold the popular dating app to an investor consortium last year to comply with a U.S. national security panel order, the parties to the deal gave information to authorities that contradicted disclosures to potential investors and Chinese regulators, Reuters has learned.<\/p>

FILE PHOTO: Grindr app is seen on a mobile phone in this photo illustration taken in Shanghai, China March 28, 2019. REUTERS\/Aly Song\/Illustration\/File Photo<\/figcaption>

They told the Committee on Foreign Investment in the United States (CFIUS) that James Lu, a Chinese-American businessman who is now Grindr\u2019s chairman, had no previous business relationship with a key adviser to the seller, a man named Ding\u2019an Fei, according to a Reuters review of the parties\u2019 written submissions to CFIUS.<\/p>\n

Fei, a former private equity executive, was acting as an adviser to Beijing Kunlun Tech Co Ltd, Grindr\u2019s owner at the time, on the deal, the documents show.<\/p>\n

\u201cThe investors and Ding\u2019an Fei have at no time conducted business together in their personal capacities prior to the proposed transaction,\u201d Kunlun and the investor group, called San Vicente Holdings LLC, wrote to CFIUS in a response dated March 27, 2020.<\/p>\n

However, when Lu was raising funds to buy Grindr in the second half of 2019 and early 2020, potential investors were told by firms helping him raise the money that Fei was involved in the effort with him in various capacities, a review of four different fundraising documents shows.<\/p>\n

The duo had also done business together in other ventures: Fei was a member of the board of a Chinese restaurant operator in which Lu served as chief executive officer, according to that restaurant company\u2019s 2018-2019 annual report.<\/p>\n

The discrepancies and omissions in the parties\u2019 response to U.S. authorities, reported by Reuters for the first time, could prompt a new review from CFIUS, according to six former U.S. officials and lawyers familiar with the panel\u2019s rules. If CFIUS were to find the statements were not true, it can also lead to civil penalties and criminal charges under the false statement provisions of the U.S. penal code, they said.<\/p>\n

\u201cIf a transaction was approved based on misrepresentations, that could well invalidate the approval of the transaction,\u201d said Brent McIntosh, who served as the Treasury Under Secretary responsible for CFIUS when the Grindr deal was cleared. McIntosh declined to comment on the specifics of Reuters\u2019 findings.<\/p>\n

San Vicente spokesman Taylor Ingraham said that \u201ca complete and accurate account of James Lu\u2019s relationship with Ding\u2019an Fei, as well as his investments and business activities in China, was provided to CFIUS prior to the agency\u2019s approval of San Vicente Holdings\u2019 acquisition of Grindr.\u201d<\/p>\n

Ingraham declined to make Lu, who owns a 17% stake in the buyer\u2019s group, available for an interview. Lu, Fei, Kunlun and Grindr did not respond to emailed requests for comment.<\/p>\n

CFIUS and the U.S. Treasury Department, which chairs CFIUS, did not respond to requests for comment.<\/p>\n

Related Coverage<\/p>\n<\/p>\n

CHINA DEALINGS<\/h2>\n

The documents reviewed by Reuters include a resume for Lu that was put together by the parties in support of the CFIUS application. While the resume lists positions going back to 2002, it does not mention some of his business dealings in China. In particular, Chinese regulatory filings show Lu is chairman of a Chinese investment firm, where a local government is the majority shareholder.<\/p>\n

Scott Flicker, a regulatory partner at law firm Paul Hastings LLP who was not involved in the Grindr case and reviewed Reuters\u2019 findings, said CFIUS would want to know about Lu\u2019s business dealings in China when assessing whether his past could be used by Beijing to compromise him.<\/p>\n

\u201cIt is potentially relevant information for the CFIUS review. The integrity of the acquiring party is relevant to the question of threat of exploitation,\u201d Flicker said.<\/p>\n

However, some lawyers played down the possibility that CFIUS would reopen its review. They noted that there is no publicly known precedent of the panel ever having done so. Were CFIUS to identify misstatements in a review, it would likely take action only if they significantly raised the risk of a transaction harming national security, said Alexis Early, a regulatory partner at law firm King & Spalding LLP who was not involved in the Grindr deal.<\/p>\n

Reuters could not determine whether San Vicente and Kunlun disclosed those activities to CFIUS subsequently.<\/p>\n

Reuters first reported about the ties between Lu and Fei in June of last year, after CFIUS had already approved the sale of Grindr to San Vicente for $620 million. Reuters could not determine whether CFIUS had taken any action following that Reuters report.<\/p>\n

Since then, Reuters has reviewed three sets of confidential written questions that CFIUS sent to the parties, their responses to them and several supporting documents. Reuters could not determine whether CFIUS knew of the specific discrepancies reported in this article when it approved the deal last year.<\/p>\n

Ingraham did not comment on whether there were any additional communications with CFIUS beyond the set of questions and answers seen by Reuters.<\/p>\n

GRINDR SALE<\/h2>\n

Based in West Hollywood, California, Grindr is especially popular among gay men and has millions of users. CFIUS ordered Kunlun, a Chinese mobile gaming company, in May 2019 to sell Grindr, giving it about a year to complete the deal. The move was among a series of actions the United States took in recent years against Chinese companies.<\/p>\n

Reuters previously reported that Kunlun was ordered to divest Grindr because U.S. authorities worried personal information about Americans could fall into Beijing\u2019s hands. here<\/p>\n

Lu started raising money from outside investors for the Grindr acquisition in the months after the CFIUS order, according to the fundraising documents and the responses to CFIUS. Lu first sought money for the acquisition through a fund called Duo Capital, and later an entity called TGL Capital.<\/p>\n

In the fundraising documents, Fei is named as associated with the funds in various ways, including as a contact person for Duo Capital, a member of the external advisory team of Duo Capital and as a co-leader of TGL Capital. Reuters could not learn more about his role or independently verify the information.<\/p>\n

The ties between Fei and Lu came to CFIUS\u2019 attention during the review. In the third set of questions, CFIUS asked, \u201cIs Mr. Ding An Fei of TGL Capital (formerly known as Duo Capital) the same Dingan Fei\u201d who is listed as \u201can individual who should receive notices on behalf of Beijing Kunlun Tech Co Ltd?\u201d<\/p>\n

In their March 27, 2020 response, the parties denied any ties. \u201cNeither Ding\u2019an Fei nor anyone else employed by or representing Kunlun has ever held a position with TGL Capital, Duo Capital, or San Vicente,\u201d they wrote.<\/p>\n

Lu did not respond to questions about Duo and TGL.<\/p>\n

San Vicente and Kunlun also told CFIUS in their March 27, 2020 response to questions about the relationship between Fei and the San Vicente investors that Lu knew Fei \u201cbecause they have each held positions in the investment community working on Asia-U.S. transactions.\u201d<\/p>\n

However, Fei sat on the board of restaurant operator Life Concepts Holding, in which Lu served as CEO, according to the company\u2019s annual report. Fei stood down from Life Concepts\u2019 board in April 2020, amid the CFIUS review, without disclosing a reason, according to a Life Concepts filing with the Hong Kong stock exchange.<\/p>\n

Life Concept, based in Hong Kong, did not respond to a request for comment.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

NEW YORK (Reuters) – When Grindr Inc\u2019s<\/p>\n","protected":false},"author":3,"featured_media":118824,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23054],"tags":[],"yoast_head":"\nExclusive: Grindr's U.S. security review disclosures contradicted statements made to others - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/markets\/exclusive-grindrs-u-s-security-review-disclosures-contradicted-statements-made-to-others\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Exclusive: Grindr's U.S. security review disclosures contradicted statements made to others - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"NEW YORK (Reuters) – When Grindr Inc\u2019s\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/markets\/exclusive-grindrs-u-s-security-review-disclosures-contradicted-statements-made-to-others\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2021-03-29T10:43:25+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/03\/cnewsfotor758-1.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/markets\/exclusive-grindrs-u-s-security-review-disclosures-contradicted-statements-made-to-others\/\",\"url\":\"https:\/\/precoinnews.com\/markets\/exclusive-grindrs-u-s-security-review-disclosures-contradicted-statements-made-to-others\/\",\"name\":\"Exclusive: Grindr's U.S. security review disclosures contradicted statements made to others - 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